Interviews
Cotton prices continue to follow same mini roller coaster track
12 Jun '07
3 min read
The increase in the projected U.S. carryover, now up to 9.8 million bales for the current marketing year, is now precariously close to the 10 million bales level we mentioned six weeks ago. Too, if in fact U.S. export fails to meet the USDA estimate, carryover will climb to the record ten million bale level.
While the USDA report appears bearish given the increasing carryover in the U.S., the report does offer some bullish news. USDA reduced its estimate of Chinese carryover stocks for the current year by nearly 1.3 million bales, down to 14.6 million. This lends to support to USDA's estimate for 2007-08 U.S. exports of 17.5 million bales, or 4.5 to 5.0 million more than in 2006-07.
Yet, let's not get too excited about a price rally just yet. The report also increased world ending carryover nearly 500,000 bales for the 2007-08 season.
For 2007-08 the world crop is estimated at 115.9 million bales, down 100,000 from last month while consumption was increased 410,000 bales to 127.4 million. Thus, next season's ending stocks were estimated to climb to 51.3 million bales, up 500,000 from last month's estimate.
The key is that ending stocks will still be above 50 million bales, thus the stocks to use ratio will be above 40 percent, too high to allow for much of a price rally. Nevertheless, a challenge of the 60 cent level is in the offering for the December contract. Yet, a heavy cap sits at the 62-63 cent level-assuming the 60 cent barrier can be scaled.
While the USDA report appears bearish given the increasing carryover in the U.S., the report does offer some bullish news. USDA reduced its estimate of Chinese carryover stocks for the current year by nearly 1.3 million bales, down to 14.6 million. This lends to support to USDA's estimate for 2007-08 U.S. exports of 17.5 million bales, or 4.5 to 5.0 million more than in 2006-07.
Yet, let's not get too excited about a price rally just yet. The report also increased world ending carryover nearly 500,000 bales for the 2007-08 season.
For 2007-08 the world crop is estimated at 115.9 million bales, down 100,000 from last month while consumption was increased 410,000 bales to 127.4 million. Thus, next season's ending stocks were estimated to climb to 51.3 million bales, up 500,000 from last month's estimate.
The key is that ending stocks will still be above 50 million bales, thus the stocks to use ratio will be above 40 percent, too high to allow for much of a price rally. Nevertheless, a challenge of the 60 cent level is in the offering for the December contract. Yet, a heavy cap sits at the 62-63 cent level-assuming the 60 cent barrier can be scaled.
O.A. Cleveland
Popular News
Leave your Comments
Editor’s Pick
Yohan Lawrence
Joint Apparel Association Forum (JAAFSL)
Charath Narasimhan
Indian Terrain Fashions Ltd
Sirinada Preechawitayakul
Brand - Senada
Aleksandre Akhalkatsishvili
Label - Aleksandre Akhalkatsishvili
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
